The previous peak of 30,474 points came in July, but the exchange plunged in August as opposition groups led by politician Imran Khan and cleric Tahir-ul-Qadri began rallies and a sit-in outside parliament to try to topple the government of Prime Minister Nawaz Sharif.

Tensions peaked at the end of August when it appeared the military might intervene as it has previously. But the situation has since calmed down and Qadri called off his protest in the capital late last month.

"Now the investors' focus has shifted towards economic matters from the political affairs of the country," said Mohammad Sohail, the chief executive officer of Topline Securities.

On the economic front official data showed that inflation had plunged to a 17-month low, raising investors' hopes that the central bank might slash the basic interest rate in its next review.

"The inflation (rate) has come down to 5.8 percent and that is 17-month low so investors look forward to corresponding cut in interest rates," Sohail said.

In line with the international fall in commodity prices, especially oil, the government last week slashed petroleum prices by an average of eight percent -- the largest price relief ever.

Pakistan's long-moribund economy has shown some glimmers of revival under Sharif's government.

Ratings agency Moody's upgraded the country's outlook to 'stable' from 'negative' in July, citing its improving external liquidity position and commitment to reforms.